Can someone please talk me through that sheet? I feel like a right idiot trying to understand it, but obviously 1 mil ain't on there lol
So how on earth is Hollie getting a 1MIL figure ?
The balance sheet shows a true indicator for business worth. It gives the true financials. So W&W balance sheet is healthy as its book value is £70k (assets - liabilities) but compared to last year that’s down by £100k
Basically
Fixed Assets are things like machinery, office equipment, vehicles, tools. So they state £9299 (things they own outright)
Current assets are things like current stock, who owes them money and money in the bank so the figure for them is £200,251.
Assets are all the things you can convert into cash.
Current liabilities are who they owe money to - so bank loans, HP purchases (cars and finance etc) so they state that’s £139,447 (money that they have to pay within the next year)
So now you Subtract total liabilities (£139,447) from total assets (£209,550) and you end up with the company’s net worth, (£70,103) also known as shareholder equity — the shareholders’ ownership stake after all the debts are paid.
Their capital is the net retained profit for the year. This is the figure that is taken from the profit and loss account after tax. Capital is any money invested by the business owner or shareholders. Reserves are the retained profits of the business. Theirs is £29,389
A balance sheet is a financial statement used in accounting. It includes three main ingredients: your assets, your liabilities and the shareholders' equity. In other words, it records what you own (assets) and who owns it – either a third party like a bank (liability) or the company and its shareholders (equity).
The balance sheet in particular is an invaluable tool. It shows your
business’s net worth and overall financial health, by recording your assets, liabilities and shareholder’s or owner’s equity.
So the business is not worth £1M like she likes to boast about and just makes her look like a dickhead.
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If I have got this wrong someone please tell me otherwise.
![Rolling on the floor laughing :rofl: 🤣](https://cdn.jsdelivr.net/gh/joypixels/emoji-assets@5.0/png/64/1f923.png)
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Basically Hollie is basing the 1MIL business worth on the total income from sales (not income - expenses = profit ) with a huge multiplier to get the 1MIL figure. Not taking into account the balance sheet either. If I was buying a business say on dragons den
![Rolling on the floor laughing :rofl: 🤣](https://cdn.jsdelivr.net/gh/joypixels/emoji-assets@5.0/png/64/1f923.png)
you wouldn’t base a businesses worth based purely on sales. You have to take into account the expenses to get the profit and then look at the balance sheet and if I saw a balance sheet with a finally figure of £70k a year than that does not amount to a 1 mil business. Who would buy a business with a year ending on 70k for 1 mil £. It would take 14 years to get back my 1MIL £
she literally lives in another dimension.
she must have based it on say £200k in sales income for this year and used a 5x multiplier thinking that gives her the business’ worth
![Rolling on the floor laughing :rofl: 🤣](https://cdn.jsdelivr.net/gh/joypixels/emoji-assets@5.0/png/64/1f923.png)